Wrong solution for Equitable Life

I agree with Patrick Collinson that taxpayers should not have to make good the disappointments of Equitable Life's policyholders (Money, July 19). Paul Braithwaite of the Equitable Members' Action Group (July 19) supported demands for those with preferential terms (GARs) to have them honoured, leading to the Lords judgment, and has continued the fight for many years.

I have campaigned for those without GARs (see stonebanks.co.uk). The non-GARs had not been warned about the earlier policyholders' guarantees, and the GARs paid no extra for those guarantees, which could only be honoured at the expense of those without them. Equitable Life did not intend later policyholders to subsidise others - hence the court actions. But when interest rates fell, the GARs became valuable and the GAR activists demanded some of the pensions that rightly belonged to others. I proposed a solution whereby all policyholders would have their policy values reduced by one-sixth, and that amount be used to give the GARs an increase (on 5/6 of their holdings) for failure to honour the GAR and to give non-GARs a similar uplift for failure to warn of the liability to other policyholders (fraud if deliberate or mis-representation otherwise). This would have given everyone full asset shares.

The GAR activists have been better organised and have won their case. I prepared a substantial submission for the high court in 2002. We were arguing over £15bn, but the judge declined to hear it. Tens of thousands of with-profits endowment and non-GAR pension policyholders have had their payouts cut to pay for uplifts for GAR pension policyholders. The whole affair stinks.David StonebanksStevenage, Hertfordshire